What's the Difference Between Hazard Insurance and Homeowner's Insurance?

You'll likely hear the term ‘hazard insurance’ when you're applying for a home loan. Hazard insurance is not a separate insurance policy but rather part of your homeowner's insurance policy.

How much coverage and the cost of coverage varies, but every mortgage will require some sort of hazard insurance.

Find out more about what hazard insurance covers and why it's a required part of your mortgage.

What does hazard insurance cover?

Like mentioned above, hazard insurance and homeowner's insurance are not two different insurance policies. Hazard insurance is part of your homeowner's insurance and covers the structure of the home.

The types of "hazards” typically covered are fire damage, storm damage, vandalism, and more. However, it usually doesn't cover physical injuries or personal loss that can occur from the hazards.

There are many sections to home insurance policies, some of which may include liability coverage for injuries and personal items. But hazard insurance is specific to damages to the structure.

Why is hazard insurance needed?

You may need to have hazard insurance set before your home loan is issued. This is because it's the only portion of the policy that protects the structure of the home.

A reliable insurance policy is also a smart choice for protecting your investment! You may consider extending your coverage beyond what your loan requires.Though we always hope for the best, it's important to also prepare for the worst.

Is hazard insurance always included in homeowner's insurance?

Insurance policies and the coverage they provide vary, but typically, yes it is included. If you're unsure whether your policy has enough coverage for your loan, please ask us or your insurance agent to review it with you.

We aim to make the mortgage process as smooth as possible. If there is any part that is unclear, please contact us and we'd be happy to assist!

How much does it cost?

The cost of your homeowner's insurance with hazard insurance depends on factors like the provider, the value of your home, your policy limits, and the amount of your deductible.

Before you can start shopping around for insurance quotes, you need to apply for a home loan! Applying is fast and can be done right now, securely from our website. We look forward to helping you achieve your homeownership goals!